Bank lending to the priority sector grew just 9.2% on an annualised basis in November this year because of lower offtake in the agriculture and MSME segments, besides a decline in micro credit.
This is the lowest rate of growth in lending to the crucial sectors during the current fiscal.
Credit offtake by the priority sector had grown by 21% during the same month of 2010.
Credit disbursement to the priority sector stood at Rs 12.53 lakh crore in November, compared to Rs 11.48 lakh crore in the same month last year, according to the Reserve Bank of India.
In November, bank disbursements to agriculture and allied activities went up by a mere 7.3% to Rs 4.41 lakh crore. In November 2010, credit disbursement to the segment had gone up by 20% on an annual basis.
Similarly, growth in offtake by the micro and small enterprises (MSME) slowed to 16.1% at Rs 4.73 lakh crore in November. Bank credit disbursement to the sector had increased by 21.6% in November last year.
As far as micro credit is concerned, the sector witnessed a decline of 10.5% during the month under review to Rs 25,343 crore. Micro credit had grown by over 51% in the same month last year.
Credit to the housing sector in November this year stood at Rs 2.36 lakh crore, a meagre 1.9% growth on an annual basis. The growth in credit to housing had stood at 9% in November 2010.
Bank credit disbursement to weaker sections grew by 11.7% to Rs 2.11 lakh crore during the month under review.
Credit offtake by weaker sections from banks had risen at an annual rate of 29.8% in November last year.
While some priority sectors like agriculture and loans for weaker sections is disbursed at an interest rate lower than the prime lending rates, other segments do not fall under the subsidised lending regime.